RE:RE:RE:RE:RE:Multi lateral wells and other plays.....Agreed, applying the latteral drilling tech developed during the shale period, to the bluesky, clearwater type formation is the thing to keep an eye on.
These heavy oil wells need a higher oil price to breakeven, but over that level, they produce cash much faster. This means that until late last year, there was no point in applying this tech to this resource.
But now that the price has crossed that break even point, this is the new IT thing. As far as I can see, there is very little of this resource known in the US. If it turns out there are large areas of this resource in the US, then that is a problem for rapid increased production - but that doesn't seem to be the case.
Clearwater needs three things,
Rock with the right Porosity,
Large enough area
Oil with the right weight (so it will flow on its own).
You need all three. The fairway seems to be quite regional in terms of places where you get all three, so you have to explore and test to see what your land has beneith it.
Having this resource in Canada means that its development will be retarded by Canadian Governement policies discouraging foreign investment, transport constraints. This means it should be great for the few companies that have it, and they may not face much competition from new newbys.
BTE for example - it looks like they have a good resource to develop, but they are held back by having sold about half they oil at last years prices. That stategy puts them about 12 months behind.
Its hard to predict what OBE will do in the second half of this year with respect to expanding heavy oil production. If they see an opportunity, they'll have the money to drill hard all through the second half of the year. The decision will be up to them, not one dictated by their bankers, or their prior hedging decisions.
It would be nice to know what was driving OBE's share price today. It slipped over the last two days. I bought some more yesterday at the lows, thinking it may get cheaper, but this will do. Then here we are today with a near 13% jump. Whatever the reason is company specific. What changed in the last 24 hours? Will be interesting to see.